HI Everyone! 

It’s Hector and I’m always pleased to hear from credit professionals out there. I’m glad that many of you are adjusting to your new home offices and that your work is continuing to move along. Regretfully, I’ve also been hearing from some of you who are more stressed out now than before the pandemic. 

One of the biggest changes mentioned to me has to do with the rise in the number of past due accounts. As we all understand, an economic downturn will always bring about an increase in delinquencies, which unfortunately doesn’t necessarily correspond to an increase in successful collections. In fact, with consumer and commercial bankruptcies on the rise, many credit professionals are getting a little worn out with chasing accounts that have in the end become non-contactable and uncollectible. 

As you know, timing is everything and while there is still a little life left in that past due account, it’s important to send it over to your collection partner as early as possible. Many years ago the Commercial Law League of America published a general collection probability  guideline that correlated the time from the payment due date to the time an account was placed for third party collection support.

During normal times: 

However, in view of certain industries that have been particular impacted, such as the travel industry in which airlines, hotels, convention centers, and all related horizontal and vertical chain suppliers are being affected, one might consider the above collection probabilities rates to be even lower at the given period of time. 

In these very unpredictable times, especially with huge companies and industries laying off tens of thousands of employees and declaring bankruptcy as well, a very proactive and early placement collection policy can’t be emphasized enough. 


Hector the Collector is a credit and collection advice column by Nancy Seiverd President CMI Credit Mediators Inc. Your thoughts and comments (nseiverd@cmiweb.com) are most welcome!

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